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Strength Seen in Alpha Metallurgical (AMR): Can Its 3.9% Jump Turn into More Strength?

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Alpha Metallurgical (AMR - Free Report) shares rallied 3.9% in the last trading session to close at $134.07. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 27.7% loss over the past four weeks.

Alpha Metallurgical Resources is poised to benefit from improving metallurgical coal demand due to expected increase in long-term global steel production.  Its high quality coal assets and low- cost profile are an added advantage compared to its peers. Courtesy of its stable earnings, the company has repaid  its long-term loan much ahead of maturity and is buying back shares to increase shareholders value.

The company is the largest domestic metallurgical coal producer and generates nearly 71% of its revenues from coal exports to its clients in global market. Its transition towards lower-cost and higher-quality met coal operations ensures strong future metallurgical coal production with minimal growth in capital investment.

This company is expected to post quarterly earnings of $24.25 per share in its upcoming report, which represents a year-over-year change of +2501%. Revenues are expected to be $1.06 billion, up 169.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Alpha Metallurgical, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AMR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Alpha Metallurgical is a member of the Zacks Mining - Miscellaneous industry. One other stock in the same industry, Newmont Corporation (NEM - Free Report) , finished the last trading session 2.1% higher at $64.18. NEM has returned -8.5% over the past month.

Newmont's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.76. Compared to the company's year-ago EPS, this represents a change of -8.4%. Newmont currently boasts a Zacks Rank of #3 (Hold).


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